The corner convenience store (CCS) gets its cool drinks delivered by a wholesaler at CCS, light cola

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The corner convenience store (CCS) gets its cool drinks delivered by a wholesaler at CCS, light cola sells at a rate of 40 six-packs per day. The shop is open 250 days per year. a six pack of light cola costs CCS $24. Annual holding cost is 10% of the cost of the cola. It costs CCS $350 to place an order and this covers any delivery charge the wholesaler only sells in six packs.
a. Determine the (EOQ)
b. Determine the average stock held
c. Calculate the annual holding cost
d. How many orders should be placed per year?
e. Calculate the annual ordering cost
f. What is the annual operating cost of the inventory system?
g. How much will CCS spend on buying light cola per year?
Economic Order Quantity
Economic order quantity (EOQ) is the ideal order quantity a company should purchase to minimize inventory costs such as holding costs, shortage costs, and order costs. This production-scheduling model was developed in 1913 by Ford W. Harris and has...

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Question Posted: Nov 03, 2017 03:30 AM

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The corner convenience store (CCS) gets its cool drinks delivered by a wholesaler at CCS, light cola

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a Economic Order Quantity EOQ Cost 40 Fixed cost 24 ...View the full answer

Cost Accounting A Managerial Emphasis

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